U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                  FORM 10-KSB/A
                                Second Amendment

       [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                       EXCHANGE ACT OF 1934 [Fee Required]
                    For the fiscal year ended April 30, 1999
                                       OR
          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]
        For the transition period from _______________ to _______________

                           Commission File No. 0-9848

                                  Initio, Inc.
                 (Name of small business issuer in its charter)

                    Nevada                                22-1906744
        (State or other jurisdiction of                (I.R.S. Employer
         incorporation or organization)               Identification No.)
      2500 Arrowhead Drive, Carson City, Nevada            89706
      (Address of principal executive offices)           (Zip Code)

         Issuer's telephone number, including area code: (702) 883-2711

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:
                          Common Shares, $.01 par value

                                (Title of Class)

 Check whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the Exchange  Act of 1934 during the  preceding 12 months (or for
such shorter period that the registrant was required to file such reports),  and
(2) has been subject to the filing requirements for the past 90 days.
                         Yes    X      No _____
 Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B in this form, and no disclosure will be contained, to the best of
registrant's   knowledge,   in  definitive   proxy  or  information   statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. [ ]

 State Issuer's Net Revenues for its most recent fiscal year: $9,682,000.

State the aggregate market value of the voting stock held by  non-affiliates  of
the  registrant:  $4,734,654  (based upon the average bid and asked price of the
registrant's Common Shares, $.01 par value, as of July 27, 1999).

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.

Common Shares, $.01 Par Value                            4,640,541
     (Title of Class)                           (No. of Shares Outstanding
                                                     at July 27, 1999)

                 DOCUMENTS INCORPORATED BY REFERENCE:  None

Transitional Small Business Disclosure Form (check one):

                                       Yes___         No   X



<PAGE>

INITIO, INC.

10-KSB/A                        EXPLANATORY NOTE

      During  the  course of  preparation  of the  10-KSB,  lines  which did not
materially affect the presentation as a whole were  inadvertently  dropped.  The
most significant changes are in the Consolidated  Statements of Cash Flows where
the line  "Gain on sale of  marketable  securities"  has  been  inserted  and in
Exhibit 27 where the Basic Earnings and Diluted  Earnings  (Loss) Per Share were
changed to (.17) from (.18).


<PAGE>

                                  Initio, Inc.
          Consolidated Statements of Operations and Comprehensive Loss
                               For the Year Ended

                                            April 30, 1999       April 30, 1998
                                            --------------       --------------


Income
  Interest                                   $    94,708          $    62,042
  Gain on the sale of
    marketable securities                        279,093              498,752
                                             -----------          -----------
                                                 373,801              560,794
                                             -----------          -----------

Expenses
  General and Administrative                     236,608              261,916
  Interest                                        92,400               68,320
                                             -----------          -----------
                                                 329,008              330,236
                                             -----------          -----------

Income from continuing operations                 44,793              230,558

Income (loss) from discontinued
  operations, net of income tax benefit          54,436            (1,035,147)
                                             -----------          -----------

Net income (loss)                                 99,229             (804,589)
                                             -----------          -----------
Other comprehensive loss
  Unrealized gains (losses) on
  Marketable securities
    Arising during the period                    (43,178)             445,149
  Reclassification of gains realized            (355,943)             (81,022)
                                             -----------          -----------
                                                (399,121)             364,127
                                             -----------          -----------
      Comprehensive Loss                     $  (299,892)         $  (440,462)
                                             -----------          -----------


Income (Loss) per common share
      Basic
      Continuing operations                        $0.01                $0.05
      Income (loss) from discontinued
        operations                                 $0.01               ($0.22)
                                             -----------          -----------
        Net income (loss)                          $0.02               ($0.17)
                                             -----------          -----------
      Diluted
      Continuing operations                        $0.01                $0.05
      Income (loss) from discontinued
        operations                                 $0.01               ($0.22)
                                             -----------          -----------
        Net income (loss)                          $0.02               ($0.17)
                                             -----------          -----------

Weighted average shares used in calculation
      Basic                                    4,462,682            4,842,737
                                             -----------          -----------
      Diluted                                  4,462,882            4,842,737
                                             -----------          -----------

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.


                                      -2-
<PAGE>

                                  Initio, Inc.
                           Consolidated Balance Sheets
                                      As at

                                                      April 30,       April 30,
                                                        1999            1998
Assets

  Cash                                              $1,182,993       $2,249,992
  Marketable Securities                              1,208,061        1,073,308
  Net assets of discontinued operations              3,809,844        3,770,152
  Deferred tax asset                                   884,000               --
  Property and equipment, net                        1,506,452        1,476,610
  Other assets                                         200,919          305,818
                                                    ----------       ----------
    Total assets                                    $8,792,269       $8,875,880
                                                    ==========       ==========

Liabilities and Stockholders' Equity

  Liabilities
  Accounts payable                                  $    9,277       $   11,498
  Accrued expenses                                      31,500            9,966
  Mortgage payable                                     873,774          914,105

  Subordinated convertible debenture                 3,500,000        3,000,000
                                                    ----------       ----------
                                                     4,414,551        3,935,569
  Commitments
  Stockholders' Equity
  Common stock, $.01 par value,  Authorized
  10,000,000 shares,  5,065,406 issued and
  4,636,008  outstanding shares,  5,271,935
  issued and 4,842,537 outstanding shares
respectively                                            50,654           52,719
Additional paid in capital                           8,616,042        8,876,678
Accumulated deficit                                 (3,826,308)      (3,925,537)
Accumulated other comprehensive income                 115,285          514,406
                                                    ----------       ----------
                                                     4,955,673        5,518,266

Less: Treasury stock, 429,398 common
  shares                                              (577,955)        (577,955)
                                                    ----------       ----------
    Total stockholders' equity                       4,377,718        4,940,311
                                                    ----------       ----------
    Total liabilities and
      stockholders' equity                          $8,792,269       $8,875,880
                                                    ==========       ==========


The  accompanying  notes are an integral  part of these  consolidated  financial
statements.


                                      -3-
<PAGE>

                                  Initio, Inc.
                 Consolidated Statements of Stockholders' Equity

<TABLE>
<CAPTION>
                                                                                                Accumulated other
                                 Common     Paid In         Accumulated       Treasury          Comprehensive
                                 Stock      Capital         Deficit           Stock             Income                Total
                                 -----      -------         -------           -----             ------                -----
<S>                              <C>        <C>             <C>               <C>               <C>                   <C>
Balance May 1, 1997              $50,815    $8,682,183      $(3,120,948)      $(476,781)        $150,279              $5,285,548

Issuance of 60,000
  common shares to                   600        65,400                                                                   66,000
  employees

Exercise of employee
  stock options for
  130,400 common
  shares                           1,304       129,095                                                                  130,399

Repurchase of 37,527
  common shares from
  employees                                                                    (101,174)                               (101,174)

Net other comprehensive
  income                                                                                         364,127                364,127

Net Loss                                                       (804,589)                                               (804,589)
                                                            -----------                                              ----------
Balance April 30,
  1998                           $52,719    $8,876,678      $(3,925,537)      ($577,955)        $514,406             $4,940,311


Repurchase and retirement
  of 206,529 shares               (2,065)     (260,636)                                                                (262,701)

Net other comprehensive
  loss                                                                                          (399,121)              (399,121)

Net income                                                       99,229                                                  99,229
                                 -------    ----------      -----------       ---------         --------             ----------
Balance April 30,
  1999                           $50,654    $8,616,042      $(3,826,308)      $(577,955)        $115,285             $4,377,718
                                 =======    ==========      ============      ==========        ========             ==========
</TABLE>


The  accompanying  notes are an integral  part of these  consolidated  financial
statements.


                                      -4-
<PAGE>

                                  Initio, Inc.
                      Consolidated Statements of Cash Flows
                               For the Year Ended


                                                 April 30, 1999   April 30, 1998

Cash flows from Operating Activities;

  Income from continuing operations                $    44,793      $   230,558
  Amoritization                                       (279,093)        (498,752)
  Gain on sale of marketable securities                129,912          164,521
  Other comprehensive income                          (399,121)         364,127
                                                   -----------      -----------
    Cash (used in) provided by
      continuing operations                           (503,509)         260,454
                                                   -----------      -----------

Cash flow (used in) provided by
  discontinued operations                             (774,886)         557,093
                                                   -----------      -----------

Net cash (used in) provided by
  operating activities                              (1,278,395)         817,547
                                                   -----------      -----------

Cash flows from Investing Activities

Purchases of property and equipment                    159,754          (70,844)
Net proceeds from sales/(purchase) on
   marketable securities                              (145,326)         100,973
                                                   -----------      -----------
  Net cash provided by investing
   activities                                           14,428           30,129
                                                   -----------      -----------

Cash flows from Financing Activities

  Net repayment of short term debt                        --         (1,850,000)
  Debenture proceeds                                   500,000        3,000,000
  Debenture issuance costs                                --            (43,280)
  Mortgage repayment                                   (40,331)         (39,987)
  Sale of common stock, net of
    treasury stock repurchase                             --             35,222
  Common stock repurchase                             (262,701)            --
                                                   -----------      -----------

    Net cash provided by
      financing activities                             196,968        1,101,955
                                                   -----------      -----------

  Net ( decrease ) increase in cash                 (1,066,999)       1,949,631
  Cash at beginning of year                          2,249,992          300,361
                                                   -----------      -----------
  Cash at end of year                              $ 1,182,993      $ 2,249,992
                                                   ===========      ===========

  Supplemental disclosure of continuing
     operations cash flow information:

  Cash paid during the year for interest              $92,400          $68,320
                                                      =======          =======

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.


                                      -5-
<PAGE>

Initio, Inc.
Notes to the Consolidated Financial Statements


1. Summary of Significant Accounting Policies

Nature of Business

In past years Initio,  Inc., ( the " Company " or "Initio" ), through its wholly
owned  subsidiary,  Deerskin  Trading  Post,  Inc. ( "  Deerskin " ),  primarily
marketed  leather goods by way of the Deerskin  catalog and gifts and housewares
through its' Joan Cook catalog.

In April,  1999, the Company entered into an agreement to sell materially all of
the assets of its Deerskin  operation.  Since May, 1999, when the asset sale was
culminated,  the  Company  has begun the  process of  identifying  new  business
opportunities.

Basis of Presentation

The consolidated  financial  statements  include the accounts of the Company and
Deerskin.  All material  intercompany items have been eliminated.  Certain items
shown have been reclassified to conform to the fiscal 1999 presentation.

Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the reported balances in the financial  statements.  Actual results could
differ from management's best estimates.

Marketable Securities

The Company has classified all its marketable  securities as available for sale,
which presented at their estimated fair market value,  which has been determined
based upon security market quotes.  Realized gains and losses,  calculated based
upon specific  identification  of shares sold, are included in the determination
of Net Income (Loss).  Unrealized gains and losses are included as components of
Other Comprehensive Loss.

Fair Value of Financial Instruments

The carrying amounts  reported in the  consolidated  balance sheets for cash and
cash equivalents,  accounts payable and accrued expenses  approximate their fair
value due to their short term maturities. The amounts presented for the mortgage
payable and the subordinated convertible debenture also approximate fair value.

Property and Equipment

Fixed  assets are  recorded  at cost and  depreciated,  using the  straight-line
method over their estimated useful lives, which generally  approximates 40 years
for  buildings.  Leasehold  improvements  are amortized over the lesser of their
useful lives or the remaining lease terms.
                                                    1999             1998
                                                    ----             ----
     Leasehold improvements                     $ 2,052,925       $ 1,893,171
                                                -----------       -----------
                                                $ 2,052,925       $ 1,893,171

     Less Accumulated Amortization                  546,473           416,561
                                                -----------       -----------
     Property and Equipment, net                $ 1,506,452       $ 1,476,610
                                                ===========       ===========


                                      -6-
<PAGE>

Long-Lived Assets

The Company's policy is to record  long-lived  assets at cost,  amortizing these
costs over the expected  useful lives of the related assets.  Long-lived  assets
are reviewed on a quarterly and annual basis for impairment  whenever  events or
changes in  circumstances  indicate that the carrying  amounts of the assets may
not be reasonable.  Assets are evaluated for continuing  value and proper useful
lives by  comparison  to expected  future cash flows.  Impairments,  if any, are
recognized in the consolidated  statements of operations and comprehensive  loss
in the period identified.

Stock Based Compensation

The Company continues to account for its' stock based compensation of employees,
using the intrinsic  value  approach,  described in APB No. 25.The impact on net
loss and loss per share if the fair value method of  accounting  for stock based
compensation had been adopted would have been  negligible.  Additional pro forma
disclosures as required under Statement of Financial Accounting Standards (SFAS)
No. 123,  Accounting for Stock-Based  Compensation,  are presented  within these
Notes to Consolidated Financial Statements.

Earnings (Loss) Per Common Share

Basic Loss per Common Share,  as well as Diluted Loss Per Common Shares has been
computed based upon the weighted average number of actually  outstanding  shares
of the Company's  common stock.  A  reconciliation  between the  numerators  and
denominators of the basic and dilutive EPS computations for net income (loss) is
as follows:

<TABLE>
<CAPTION>

                                              Year Ended April 30, 1999                    Year ended April 30, 1998
                                              -------------------------                    -------------------------
                                           Income      Shares        Per Share        Income          Shares       Per Share
                                        (Numerator) (Denominator)     Amounts      (Numerator)     (Denominator)      Amounts
<S>                                        <C>         <C>               <C>          <C>           <C>               <C>
Income from continuing
     operations                           $44,793                                    $230,558

Income (loss) form discontinued
     operations net of income tax          54,436                                  (1,035,147)
     benefit                               ------                                  ----------


BASIC EPS

Net income form continuing
     operations attributable to            44,793      4,462,682         $0.01        230,558       4,842,737         $0.05
     common stock

Net income (loss) from
     discontinuing operations, net
     of income tax attributable to
     common stock                          54,436      4,462,682         $0.01     (1,035,147)      4,842,737        $(0.22)

EFFECT OF DILUTIVE SECURITIES
                                                             200                                        --
Stock Options

DILUTIVE EPS

Net income from continuing
     operations attributable to
     common stock and assumed             $44,793      4,462,882         $0.01       $230,558       4,482,737         $0.05
     option exercises                     =======      =========         =====       ========       =========         =====


Net income (loss) from
     discontinuing operations, net
     of income tax attributable to
     common stock and assumed             $54,436      4,462,882         $0.01    $(1,035,147)      4,482,737        $(0.22)
     option exercises                     =======      =========         =====    ============      =========        =======

</TABLE>

Options to purchase  591,442  shares of common  stock out of the total number of
options  outstanding as of April 30, 1999,  were not included in the computation
of diluted EPS because of their anti-dilutive effect.


                                      -7-
<PAGE>

Income Taxes

Income taxes have been provided using the liability method.  Deferred tax assets
and  liabilities  are  determined  based on  differences  between the  financial
reporting and tax basis of assets and  liabilities  and are measured by applying
estimated  tax rates and laws to  taxable  years in which such  differences  are
expected to reverse.

Recently Effective Accounting Standard Adopted

The Company began conforming to SFAS 130, " Reporting Comprehensive Income " for
its'  fiscal  year  ending  April  30th,  1999.  Prior year  balances  have been
reclassified to conform with the current year's presentation.

Recently Issued Accounting Standards

In  June  1998,  the  FASB  issued  SFAS  No.  133  "Accounting  for  Derivative
Instruments and Hedging Activities",  which establishes accounting and reporting
standards for derivative  instruments,  including certain derivative instruments
embedded in other contracts. As of April 30, 1999, this pronouncement would have
no effect on the accompanying financial statements.

2. Discontinued Operations

In April,  1999,  the Company  entered  into an agreement  with Advance  Medical
Sciences,  Inc.  ("AMDS")  for the sale of  materially  all of the assets of its
Deerskin operations,  which at April 30, 1999 were categorized as a discontinued
operation.  In May 1999,  when the  transaction  closed,  the  Company  received
approximately  $500,000  in cash,  a  $3,400,000  convertible  debenture  of the
purchaser  and  was  released  from  $2,000,000   payment  of  its  subordinated
convertible debenture,  resulting in a gain before income taxes of approximately
$2,400,000. The $3,400,000 convertible debenture the Company will receive, bears
interest  at a rate of 8% per  annum,  on the  last day of each  July,  October,
January and April until June 1, 2004,  when the  convertible  debenture is to be
redeemed by AMDS. This debenture has a convertible  feature which allows for the
conversion  into shares of AMDS common stock.  The terms of the  conversion  are
such that the conversion  price shall be $5.50 per share (after giving effect to
the 1 for 30 exchange),  provided,  however,  if on or before  December 31, 1999
AMDS shall  repay  Initio  $400,000  plus  interest  accrued to the date of such
payment,   thereby  reducing  the  present   indebtedness   from  $3,400,000  to
$3,000,000,  then, in that event the initial conversion price shall be increased
from $5.50 to $6.00. The operating results of the discontinued operation were:


                                      -8-
<PAGE>

                                        Year Ended                 Year Ended
                                      April 30, 1999             April 30, 1998
                                      --------------             --------------

    Revenues                            $  9,682,000              $ 11,134,000
    Net income ( loss )                       54,436               ( 1,035,147 )
    Current assets                         2,787,278                 2,718,404
    Total assets                           4,327,950                 4,314,273
    Current liabilities                      351,106                   369,121
    Net assets                             3,946,844                 3,945,152

3. Income Taxes

At April 30th, 1999, the Company had available, for federal income tax purposes,
approximately  $4,900,000 of net operating  losses  (NOL's) and other future tax
benefits, which expire in 2004 and thereafter. These benefits were not reflected
in  the  Company's   consolidated  financial  statements  as  a  result  of  the
uncertainty  of future  utilization.  For the year  ended  April 30,  1999,  the
valuation allowance previously recorded against the deferred tax asset generated
from the  Company's  NOL's was reduced by $782,000.  Based upon the capital gain
recognized in connection  with the  transaction  described in Note 2, it is more
likely than not that approximately $884,000 in deferred asset is realizable.

4. Mortgage

In 1995, the Company borrowed  $1,000,000,  of which approximately  $873,000 was
outstanding  at April 30th,  1999.  The loan is secured by the Company's  Carson
City property, payable in monthly installments,  bears interest at the rate of 9
1/4%,  subject  to  adjustment  in the  future,  and is due in  2010.  Principal
payments approximate $40,000 per annum with a balloon payment in the final year.

5. Subordinated Convertible Debenture

In February  1998,  the Company issued  $3,000,0000  principal  amount of a five
year,  8 %,  debenture  which  is  convertible,  at $ 3.00 per  share,  into the
Company's  common  stock.  In  December  1998,  the  Company  issued a  $500,000
principal  amount  debenture,  convertible  at $ 1.54 into the Company's  common
stock.  The conversion  feature of these  debentures was greater than the market
value at issuance.  The $3,000,000 and $500,000 debentures mature on May 1, 2003
and December 23, 2003 respectively,  with all unpaid principal and interest due.
The  Company has a  commitment  from the same debt  holder for an  additional  $
1,500,000 to be used for acquisitions. The conversion price of future borrowings
is contingent  upon the future market price of the Company's  common stock.  Two
representatives of the debenture holder have been elected to the Company's Board
of  Directors.  The costs of this debt issuance have been deferred and are being
amortized  over the term of the  debenture,  using the  effective  interest rate
method.  In  connection  with the  transaction  described in Note 2, the Company
effectively  repaid  $2,000,000 of the  $3,500,000  outstanding  as of April 30,
1999.

6. Commitments

Letters of Credit

At April 30th, 1999, the Company had approximately $465,000 of letters of credit
outstanding  in connection  with the  discontinued  operations.  Pursuant to the
transaction  discussed in Note 2, these  letters of credit were  transferred  to
AMDS at closing.

7. Stockholders' Equity

Stock Option Plans

The Company has two stock option plans, the 1991 Stock Option Plan ( " 1991 Plan
" ) and the 1996 Stock  Option Plan ( " 1996 Plan " ). Under both Plans  options
to buy the  Company's  common stock have been granted to key  employees and / or
directors  of the  Company,  for terms  ranging from five to ten years and which
become exercisable at fixed times.

No further options will be granted pursuant to the 1991 plan.


                                      -9-
<PAGE>

Options  which  may  result  in the  issuance  of up to  500,000  shares  of the
Company's  common stock may be issued pursuant to the 1996 Plan.  Under the 1996
Plan the Company may award either Incentive Stock Options or Non Qualified Stock
Options.  The terms for either may not exceed ten years, while vesting is either
20% annually or as the Company's  Board of Directors  provides.  Exercise prices
approximate the market price for the Company's stock, except that in the case of
award to holders of more than 10 % of the Company's  stock the exercise is to be
set by the Company's Board of Directors. Arising from the disposal of all of its
catalog  operations,  the Company decided that all employees of Deerskin Trading
Post,  Inc., a wholly owned  subsidiary of the Company who presently  have stock
options on shares of Initio common stock,  shall be fully vested  effective upon
the closing of the transaction between Deerskin Trading Post, Inc. and AMDS. All
such persons shall have one year from April 30, 1999 to exercise such options.
Activity for the Plans is as follows for the years ended:

                                Year Ended                      Year Ended
                             April 30th, 1999                April 30th, 1998
                             ----------------                ----------------
                             Shares    Average Price      Shares   Average Price
Outstanding at
   beginning of year        646,942      $ 1.92          505,332         $1.74
Granted                       1,000        1.00          525,000          1.95
 Exercised                       -                     (  98,400 )        1.00
 Expired                  (  56,500 )      1.81        (  34,990 )        1.69
 Cancelled                        -                    ( 250,000 )        2.00
                                 --                    -----------
Outstanding at
   end of year              591,442        1.93          646,942          1.92
                         ===========                     =======

                                           Options Outstanding
                                           At April 30th, 1999
                                           -------------------

Exercise Price              shares              expires in           exercisable
--------------              ------              ----------           -----------
      1.00                   1,000                 2003                    200
      1.75                  65,442                 2000                 65,442
      1.95                 525,000                 2003                210,000
                           -------                                     -------
                           591,442                                     275,642
                           =======                                     =======

As a result of the 1991 and 1996 Plans,  had the Company  adopted the full value
approach to accounting  for employee  stock  options,  the Company's  results of
operations would have been for the years ended:

                                        April 30, 1999        April 30, 1998
                                        --------------        --------------
Net income (loss)     As reported               $99,229        (  $  804,589  )
                      Pro forma               ( 131,771 )       (  $ 828,564  )
Loss Per Share:
 Basic:               As reported                  $.02             (  $  .17)
                      Pro forma                   $(.03)            (  $  .17)
Diluted               As reported                  $.02             (  $  .17)
                      Pro forma                   $(.03)            (  $  .17)

The  foregoing  disclosures  has been  computed  using the Black  Sholes  option
pricing model with the following weighted average assumptions:

                                                              1999 and 1998
                                                              -------------
             Risk free Interest Rate                             5.63%
             Expected Lives                                      4 years
             Expected Volatility                                 50%
             Expected Dividend Yield                              0%


                                      -10-
<PAGE>

8. Related Party Transactions

The Chairman and President of the Company have for both years  presented  waived
all but nominal  current  cash  compensation,  though  they  continue to receive
fringe  benefits such as  participation  in the Company health plans.  In March,
1998, these  individuals  were granted  options,  pursuant to the Company's 1996
Plan, to purchase 250,000 shares,  each, of the Company's common stock at $ 1.95
per share,  110 % of the market price of the Company's  common stock at the time
of grant.  At the same time options to purchase  125,000  shares,  each,  of the
Company's common stock at $ 2.00 per share, previously granted to these officers
of the Company, were cancelled.

9. Lease Agreements

In accordance  with the executed Asset Purchase  Agreement,  AMDS entered into a
lease agreement with the Company for the entire building and parking lot at 2500
Arrowhead  Drive,  Carson City,  Nevada.  This lease agreement will terminate on
April 30, 2,000, for which AMDS will pay the Company an annual rent amounting to
$336,000.

In  addition,  the Company  also has future  minimum  rental  payments  under an
operating  lease that expires in 2037 which at April 30, 1999 was  approximately
$25,900 (approximately $700 per annum).

10.  Subsequent Events

In May 1999,  the Company  culminated  the sale of its Peabody  plant,  which is
included in the net assets of discontinued operations, for $ 525,000 in cash and
notes, resulting in a net before income taxes gain of $ 200,000.


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